EU puts pressure on China to appreciate its RMB!

EU puts pressure on China to appreciate its RMB!
Oct 10, 2007 21:46
ICEBERG Points: Join Date: Sep 10, 2007 Status: offline	For a long time, the appreciation of RMB has been the big concern between China and US. In the name of balancing the Sino-US trade, the US government has put much pressure on China to quicken its steps of the RMB appreciation. Compared wit US, EU is milder on this issue. But in recent days, EU has changed its attitude and calls for a rise of RMB. Why? China's trade surplus over EU and the dollar decline in recent days are the two main reasons. The Euro-dollar exchange rates has created a new record recently because of dollar decline. These pushed EU to require China to raise its RMB. However, it suggests that China will not give in to the foreign pressure to faster its RMB appreciation. On Oct.10th, Liu Jianchao, the spokesman of Ministry of Foreign Affairs reiterated that the RMB has been appreciated about 9% since the adoption of exchange rate reform. Also China will push its reform ahead and be willing to hold dialogues with concerned parties. China has the right to make its policy of foreign exchange rate in accordance with its national situation and economic growth. Both US and EU should think about themselves and find other ways to solve the problem, not just replying on the appreciation of RMB.

Oct 10, 2007 21:46

ICEBERG
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Join Date: Sep 10, 2007
Status: offline

For a long time, the appreciation of RMB has been the big concern between China and US. In the name of balancing the Sino-US trade, the US government has put much pressure on China to quicken its steps of the RMB appreciation. Compared wit US, EU is milder on this issue. But in recent days, EU has changed its attitude and calls for a rise of RMB.

Why? China's trade surplus over EU and the dollar decline in recent days are the two main reasons. The Euro-dollar exchange rates has created a new record recently because of dollar decline. These pushed EU to require China to raise its RMB.

However, it suggests that China will not give in to the foreign pressure to faster its RMB appreciation. On Oct.10th, Liu Jianchao, the spokesman of Ministry of Foreign Affairs reiterated that the RMB has been appreciated about 9% since the adoption of exchange rate reform. Also China will push its reform ahead and be willing to hold dialogues with concerned parties.

China has the right to make its policy of foreign exchange rate in accordance with its national situation and economic growth. Both US and EU should think about themselves and find other ways to solve the problem, not just replying on the appreciation of RMB.

Oct 16, 2007 04:31

JIMMYB
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Join Date: Feb 7, 2007
Status: Offline

Quote: Both US and EU should think about themselves and find other ways to solve the problem, not just replying on the appreciation of RMB.

ICEBERG, I agree with you on this point. We can not require others do whatever we like. Cooperation means that both sides should make efforts, not one side. I understand what US and EU are worried about. However, they can not let China alone to burden the pressure of RMB appreciation. Raising the exchage rate of RMB too quickly is not good for China.

Oct 17, 2007 03:46

KEVIN0518
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Join Date: Mar 13, 2007
Status: Offline

In macro-economy theory, the increase of domestic products' prices surely has impact on its exports. Then the trade surplus could be decreased. At the same time its currency is at the risk of depreciation. However, the situation is different in China. inflation might occur though the prices are keeping increasing. What does this suggest? China's economy is not developing balancedly. In this situation, China should make its currency policy independently to prevent inflation, not yielding to other nations.

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